• After experiencing a security exploit,Terra initiates a decisive emergency upgrade. 

  • Lost assets include 3.5M USDC, 60M ASTRO, 500K USDT, and 2.7 BTC.

A series of security breaches has recently escalated in the crypto market. The well-known Terra blockchain has now been added to the list of victims. The Terra blockchain has suffered a significant security breach, resulting in the theft of tokens valued approximately $5.54 million at current prices.

Their official X post reported that they have resumed block production after a temporary halt due to the exploit. The chain appends a decisive emergency upgrade. Reportedly, the validators who possess over 67% voting power on the network have updated their systems to prevent the exploit. 

The Terra chain has resumed block production at approximately 4:19 AM UTC today and the emergency chain upgrade is now complete.Transactions are now being processed, and users may resume normal activities.Validators holding over 67% of the voting power on Terra have upgraded…

— Terra Powered by LUNA (@terra_money) July 31, 2024

Following these, the price of the Terra tokens, LUNA and LUNC, experienced a downfall. LUNA reflected a 2.53% decrease to currently trading at $0.395 and LUNC is trading at $0.00008048, observing a drop of 2.82% over the last 24 hours. Notably, another crypto included in the hack, ASTRO, has dropped over 60% from $0.0483 to $0.02273.

Security Breach of Terra Chain 

The Terra blockchain endured a significant security breach, immediately prompting the network to halt all transactions temporarily. The attacker exploited a “reentrancy vulnerability in the timeout callback of ibc-hooks.” In general, IBC hooks is a module that facilitates cross-chain contract calls and token movement.

The chain exploit led to the illicit transfer of assets, including USD Coin (USDC) and Astroport  (ASTRO), in abundance. An approximate of 3.5M USDC, 60M ASTRO, 500K USDT, and 2.7 BTC, as per the Beosin Alert X post. 

Recently, on July 29, Terra Luna upgraded the 3.1.3 version of its software, including a revised burn tax distribution to increase rewards and Oracle Split logic aimed at preventing memory leaks. This upgrade was executed at block height 19,108,180, without losing a single chain block. 

In June 2024, Terraform Labs announced that the organization had shut down following a settlement with the U.S. Securities and Exchange Commission (SEC) to conclude a fraud case. And Terraform’s massive $4.47 billion settlement with the SEC related to the UST algorithmic stablecoin, which dramatically collapsed in 2022. 

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